Orlando Company Has Used the Average Cost Method for Inventory

Essay

Orlando Company has used the average cost method for inventory valuation since it began business in 2014, but has elected to change to the FIFO method starting in 2017. Year-end inventory valuations under each method are shown below: $\begin{array}{rrr}&\text { Average }\\\text { Year }&\text { Cost }&\text { FIFO }\\2014 & \$ 42,000& \$ 47,000 \\2015 & 53,000& 61,000\\2016 & 59,00 0& 68,00 0 \\2017 & 62,000& 72,000\end{array}$ Required:
How would Orlando reflect the change in accounting principle in its financial statements (ignore income taxes)?